As the Non-Performing Assets (NPAs) continue to afflict most banks, particularly those with significant levels of the so-called toxic assets, the banks face huge challenges in raising funds from wholesale markets or capital from equity investors. On the other hand, regulators are pursuing stricter enforcement of the capital requirement that makes the banks face fearsome new burdens. When the capital is still scarce, banks are overleveraged, toxic assets still carrying too much risk, the investors continue to be wary. Given this context, and as the proverb goes, 'divide and conquer', banks need to look for ring-fencing their core assets from contamination of toxic assets. This separation allows for a more efficient and focused management of their portfolios, lowering investors' monitoring costs, and helping the banks regain the investors' confidence. As one school of thought suggests, this can be achieved by forming bad banks for the toxic assets. In this issue, one of the papers discusses the need for a 'bad bank' model in the stressed asset resolution in India.

The first paper, "The Need for a 'Bad Bank' Model in Stressed Asset Resolution in India", analyzes the issue in the context of Indian banking passing through a difficult phase of twin balance sheet problem and depleting capital base. The authors, Pradeep Kumar Pattnaik, Bibekananda Panda and D Rama Krishna Reddy, argue that as the Bad Bank (BB) model has been successful in many advanced economies in resolving the impaired asset quality issue, the time has come for Indian banking to try this model. They analyze the different forms of BBs and their relative merits and demerits in the Indian context. They opine that transferring troubled assets to a separate entity would result in the improvement of the credit ratings of the primary bank, reducing borrowing and financing costs for the primary bank and ultimately increasing earnings potential. Given the dominance of public sector banks in Indian banking, the authors recommend that an appropriate government-owned BB model would be suitable to relieve the leveraged banking system.

The growing competition in the banking sector is nudging the managers towards reducing operational costs and enhancing the revenue efficiency. With the general perception that private commercial banks are more cost and revenue efficient than their public sector counterparts, there is a need to evaluate the revenue efficiency of Indian commercial banks. In the second paper, "Measurement of Revenue Efficiency of Scheduled Commercial Banks Across Ownership in India", the authors, Aparna Bhatia and Megha Mahendru, assess the revenue efficiency scores of scheduled commercial banks in India categorized across bank ownership. They calculate the revenue efficiency scores for each bank for the period 1991-92 to 2012-13. It is noticed that the scheduled commercial banks irrespective of their ownership structures have never achieved full revenue efficiency in any year of the study period, probably due to the allocative inefficiency of these banks. Further, they also observe that the Indian scheduled commercial banks operating in different sectors face the problem of scale inefficiency.

Digital banking is gaining momentum in India in general, and in particular due to the effect of demonetization. Demonetization in India during 2016 nudged the people to move towards digital banking as the cash circulation tended to be limited. In the third paper, "Progress in Digital Banking After Demonetization: Some Evidence", the authors, Nitin Bansal and Mini Jain, assess digital banking after the demonetization of a series of currency notes denominated in 500 and 1,000 in India. Using the paired samples t-test, the authors analyze the growth of digital banking services before and after demonetization. They find that the usage of digital banking services in both the terms, i.e., volume-wise and value-wise, has significantly increased after demonetization. They notice that the digital transactions have trebled and quadrupled in volume and value across various modes from wallets to cards from a year earlier. The authors conclude that as the customers switched from cash to cashless transactions, the digital banking played a significant role in the success of demonetization.

While the reduction of poverty around the globe is one of the biggest economic stories of our time, the supplementary story in achieving this is that of financial inclusion. Of course, the merits of financial inclusion are deeply rooted in empowerment, through the access to credit, which is a key link between economic opportunity and economic outcome. Financial inclusion has proven to be a powerful agent for strong and inclusive growth. Technological innovation is perhaps the most promising way to achieve financial inclusion and mobile banking is one such innovation with dramatic potential for expanding financial inclusion. In the fourth paper, "Mobile Banking and the PMJDY: Evidence from an Indian State", the author, Jasmine Gupta, assesses the use of mobile banking in Gujarat state in India during the pre-PMJDY and the post-PMJDY period. It is noticed that lack of awareness about the usage and security as well as financial illiteracy act as key barriers to the adoption and usage of mobile banking.

As people move towards retirement, the general concern among the seniors is financial freedom in the absence of pay packages. Reverse Mortgage (RM) as a loan product provides the financial freedom that lets the senior citizens live the retirement they desire, pay off medical bills, make home improvements, or just free up some extra cash. In developing countries, RM as a loan product is yet to make a mass appeal. In this context, the last paper, "Do Elder Homeowners from Different Regions Differ Significantly in Awareness and Willingness of Reverse Mortgage: Some Sample Evidence from Delhi and Rajasthan", the authors, Sarita Gupta and Sanjay Kumar, assess the level of awareness among the senior citizens in urban India. In this study, they examine whether the Indian elderly homeowners from the metro (Delhi) and non-metro cities (Jaipur, Ajmer, and Alwar) are significantly different in their awareness and willingness towards RM, as both regions are highly diversified in literacy, lifestyle, and cultural and traditional aspects. Their results show that the awareness and willingness of elderly homeowners towards RM is independent of geographic regions. The study recommends that equal efforts should be made by the National Housing Bank (NHB) and commercial banks, for the promotion of awareness of RM.